Top Aussie regulator lands hot Basel role

A top Australian bank regulator is about to be thrust into the centre of the European financial crisis as international banks argue about how to fix the region’s banking system.

Australian Prudential Regulation Authority (APRA) executive general manager
Wayne Byres
, who is responsible for the supervision of large complex banks, will move to the Swiss city of Basel, to become the secretary- general of the Basel Committee on Banking Supervision.

Mr Byres has worked in banking supervision at APRA and previously the Reserve Bank of Australia for 27 years.

He will head the secretariat of the Basel Committe and be responsible for helping develop strategy.

He will also chair the committee’s policy development group and work with other global bodies, central banks and supervisory authorities.

On top of the pressure for European banks to raise more equity, from 2013 countries are due to implement the Basel III rules, which require banks to hold extra capital and have better liquidity, to avoid a repeat of the 2008 financial crisis.

Differences are emerging between national regulators on the interpretation of the Basel III rules.

The differences threaten to undermine the goal of creating a level playing field for banks. European banks, weighed down by exposure to highly indebted governments like Greece, said this week they would find it difficult to raise extra capital from investors to meet the rules.

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Josef Ackermann, the head of Germany’s biggest financial institution, Deutsche Bank, opposed a Europe-wide capital injection into the financial sector on Thursday.

The International Monetary Fund had suggested European banks might require fresh capital of €200 billion ($271 billion), but Mr Ackermann said it would not solve the crisis.

One senior local banker who has dealt with Mr Byres on Basel issues said he was a “thoughtful, considered and pragmatic regulator".

Unlike some counterparts in Europe and the US, APRA has been a strong enforcer of bank rules and has sometimes adopted a more conservative approach. The three-year secondment is viewed as a stepping stone to higher office for Mr Byres, who could eventually head APRA. He was unavailable to comment Friday.